Renewables/GOES MMI: EIA forecasts rise in electricity generation from renewables

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The Renewables Monthly Metals Index (MMI) rose by 2.9% for this month’s reading.

January 2022 Renewables MMI chart

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EIA: electricity generation from renewables to rise in 2022, 2023

The Energy Information Administration forecast the U.S. share of electricity generation from renewables will rise in 2022 and 2023.

“Our forecast for the natural gas share as a generation fuel declines primarily as a result of increased generation from new renewable energy generating capacity,” the EIA reported in its Short-Term Energy Outlook released Jan. 6.

The EIA forecast solar capacity growing at a faster rate than wind. Furthermore, the EIA forecast an uptick in hydropower.

“The extreme drought conditions in the West may moderate somewhat in the next year, and we forecast that the share of U.S. generation from hydropower will rise from 6% in 2021 to 7% in 2022 and 2023,” the EIA reported.

China Molybdenum to boost cobalt output

According to a report by Nikkei Asia, China Molybdenum aims to double its cobalt output.

Glencore is the world’s largest cobalt producer, trailed by China Molybdenum.

Per the report, the Chinese firm aims to invest $2.5 billion toward a new production line by 2023.

Despite its high cost, cobalt remains a coveted battery material.

“As countries step up their climate ambitions, clean energy technologies are set to become the fastest-growing segment of demand for most minerals,” the International Energy Agency said in a 2021 report.

The share of total demand rises to over 40% by 2040 for copper and rare earth elements. The percentage rises to 60-70% for cobalt and nickel. Lithium’s share rises to 90%, the IEA said.

Glencore to buy Colombian coal mine

Speaking of Glencore, the Swiss miner announced the acquisition of the Cerrejón coal mine in Colombia.

The miner announced its intention to acquire the stakes of BHP and Anglo American in the mine in June 2021. The purchase price came in at c.$588 million.

Glencore argued the purchase won’t impact its existing climate pledges.

“Glencore’s acquisition of Cerrejón is consistent with our climate change strategy and has been factored into our stated emission reduction targets,” the miner said in a release. “We are committed to reducing our total emissions footprint by 15% by 2026, 50% by 2035 and we have an ambition of being a net zero total emissions business by 2050.”

GOES MMI

The GOES MMI, the index for grain-oriented electrical steel, ticked up 2.2% for this month’s reading.

January 2022 GOES MMI chart

The GOES coil price rose by 1.8% for this month’s reading.

With Cleveland-Cliffs as the sole domestic producer of electrical steel, the U.S. remains dependent on imports for electrical steel demand. Per a Department of Commerce survey in 2020, electrical steel accounts for around 25% of the cost of transformer production.

According to the Census Bureau’s latest data, U.S. electrical strip and sheet imports increased by 30% month over month to 3,770 tons in November.

The Infrastructure Investment and Jobs Act  includes $65 billion toward clean energy and upgrades to the nation’s electrical grid.

The National Electrical Manufacturers Association (NEMA) lauded the bill but cautioned that other improvements must be made in order to support the bill’s goals.

“While this legislation provides an unprecedented opportunity to bolster our nation’s infrastructure, its promise will only be realized if our manufacturing, supply chain and regulatory systems are able to meet the coming demand,” said Debra Phillips, president and CEO of NEMA. “Our industry looks forward to working with lawmakers on policies and programs that will fortify our nation’s manufacturing base, strengthen supply chain systems and streamline regulatory programs to support the creation of an electrified, connected, and sustainable future.”

Actual metals prices and trends

The Chinese steel plate price dipped 0.55% month over month to $828 per metric ton.

Meanwhile, U.S. steel plate fell 0.32% to $1,859 per short ton. Furthermore, GOES coil price rose 1.82% to $3,195 per metric ton.

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